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Your money funded CTF

What if I were to tell you that, if you have been a Rogers Cable subscriber for the past 12 years, you might be legally entitled to a refund up to $900 or more, depending on the cable system and time as a subscriber.

What if I were to tell you that, if you have been a Rogers Cable subscriber for the past 12 years, you might be legally entitled to a refund up to $900 or more, depending on the cable system and time as a subscriber.

Then would you care about the industry crisis over the $265 million Canadian Television Fund, which began last month when two media barons threatened to withdraw their contributions to this public-private partnership?

Let me repeat that: $900.

That's how much Keith Mahar, a former Canadian TV manager now living in Australia, calculates Rogers subscribers have paid to enrich the company ever since the Canadian Radio-television and Telecommunications Commission (CRTC) allowed cable monopolies to jack up their rates in 1993.

In return, the cable companies – which in 1993 cooked up this scheme – would contribute a percentage of the take into what was then known as the Cable Production Fund, now the CTF.

"Not only is this way off-side in a `regulated industry' it creates unfair competition whereby a monopoly protected from open competition is allowed to over-charge its captive market, then use the excess to cross-subsidize other businesses, which is unfair to both consumers and other businesses," Mahar emails from Canberra.

Since the creation of the fund, Rogers has gone on to build telephone and Internet networks, get into sports (the Blue Jays, etc.) and take over Maclean Hunter, which publishes Maclean's, Flare and Chatelaine.

Nothing to do with cable TV.

At the same time, Rogers would benefit from the fund since (a) it holds TV licences that run the Canadian programs and (2) better Canadian TV on cable ends up selling more cable.

Not to knock Rogers since it didn't ignite this crisis and, interestingly, it's been very low-key throughout it all. Instead, it was Jim Shaw and Québecor's Pierre Karl Péladeau who precipitated it – and it is noteworthy that both control empires that run CTF-subsidized programming.

Indeed, yesterday, at the "emergency hearings" on the CTF being held by Parliament's heritage committee, one of the most revealing bits came from CBC-TV executive vice-president Richard Stursberg, who not only used to chair the CTF, but also ran the Canadian Cable Television Association during the fund's nascent years.

In Ottawa to argue for the 37 per cent of the CTF that goes to CBC/Radio-Canada programming, he made the point that, in 2005, Vidéotron benefited by $18 million in programming after contributing only $15 million.

What's more – and this is key – he said "The 50 cents that went to the fund was never theirs in the first place."

That's because it was yours.

In fact, Stursberg wrote earlier this week: "The contributions cable companies are required to make are in return for the right they were granted by the CRTC in the 1990s to increase their subscription rates. However, once those expenditures were paid for, the cable companies were expected to reduce their rates to prior levels. Instead, they reached an agreement with the CRTC that allowed them to keep 50 per cent of the money that would otherwise have been refunded to their customers in exchange for giving the other 50 per cent to the CTF. In other words, the CTF cost the cable companies nothing. In fact, they received money they would never otherwise have had if they contributed to the fund."

Case closed, no?

As for the public part of the fund, $120 million for the 2006-2007 fiscal year, well, it came out of CBC's hide since the fund was created as the Chrétien-Martin Liberals were cutting $400 million from the broadcaster's budget.

As CBC president Robert Rabinovitch told the heritage committee, "Last week, a former minister of Canadian heritage (Sheila Copps) wrote in Le Journal de Montréal and in the Ottawa Sun that when she created the CTF, she considered simply giving the government's portion of the fund – $100 million – to CBC/Radio-Canada. Instead, 50 per cent of the fund was dedicated to ensure that the public broadcaster teamed up with independent producers. And that is what we did."

Meanwhile, the cable barons who have profited from this fund begrudge CBC and the indies a share of the money that never belonged to the cable barons in the first place.

Your money.

Yesterday Mahar petitioned the committee members to appear before them. But chair Gary Schellenberger told me that was "not likely" to happen.

"We have two more hearings and they are totally booked," he said, conceding that witnesses have been "primarily" interested "industry parties."

Hardly surprising since consumers have no watchdogs to represent them when it comes to these matters.

Which is why Mahar has little hope of being heard, says Duff Conacher of the Ottawa-based citizen's advocacy group Democracy Watch.

"There's no way you're going to win against a corporate lobby as strong as this," he argues. "The conflicts of interest at the CRTC are too rampant. It's a revolving door. It has been forever. Look at the commissioners. They're almost invariably from the industry. Then look at the lobbyists, almost invariably they come from the CRTC."

"I wish him luck but he's barking up the wrong tree, not in terms of the merits of what he might be pushing but in terms of where he should be starting. It's non-strategic." Conacher is pushing for a watchdog group that would start by forcing every phone, satellite and cable company to include a lick'n'stick pamphlet in its monthly mailings so customers might be informed and join up. Only then would consumers have the clout they need to fight back against unfair contracts or charges.

Just think what you could do with $900. How about a nice new LCD TV – and more cable?

SPIN ZONE: Don't miss Ira Basen's brilliant Spin Cycles on CBC Radio One's Sunday Edition at 9 a.m. Part 5, airing in hour three, looks at how some journalists are more than a little "embedded" with our troops in Afghanistan.

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